Jan 18, Colombo: The Ceylon Petroleum Corporation (CPC), the country's largest fuel supplier, is to get finanical leverage with a new credit line provided by the government of Iran.

The CPC has been facing a severe financial crisis due to skyrocketing fuel prices in the global market and to the selling of fuel at a loss in the local market. This was disclosed at a joint media briefing by the CPC and Lanka Indian Oil Company (LIOC) yesterday evening in Colombo.

According to CPC sources, the corporation incurred Rs. 3 billion in losses last December alone. This loss is expected to be halved with the recent increase in fuel prices. However, the company will still be in a tight financial position regardless of the price hike, since it has to continue its imports.

The CPC intends to ease off the pressure through the new product line that became operational last month. Under the new credit line, the government of Iran will provide 7 months of credit, out of which four months will be interest free. The rest will be given at an interest rate of 0.5%.

According to CPC chairman Asantha de Mel, this will allow the CPC to engage in uninterrupted fuel importation for seven months on credit, which will ease off the present financial pressure on the corporation gradually.

The new credit line was opened following President Mahinda Rajapaksa’s recent visit to Iran.